ROANOKE TIMES 
                      Copyright (c) 1995, Roanoke Times

DATE: Thursday, December 7, 1995             TAG: 9512070078
SECTION: NATIONAL/INTERNATIONAL   PAGE: A-1  EDITION: METRO 
DATELINE: WASHINGTON
SOURCE: Associated Press 

GOP'S BUDGET VETOED CLINTON UNVEILS HIS OWN PROPOSAL

The White House began unveiling its new seven-year budget-balancing proposal to congressional Democrats on Wednesday, even as President Clinton delivered his long-promised coup-de-grace to a Republican plan he said bore ``wrongheaded cuts and misplaced priorities.''

Clinton dispatched Leon Panetta, his chief of staff, to the Capitol to brief House and Senate Democrats about the package, which the administration plans to present to Republicans during budget talks this week.

Compared with a proposal Clinton made in June, the new plan is expected to contain deeper cuts in welfare and many domestic programs, additional limits on business tax breaks, and perhaps a smaller tax cut for families.

But it will call for the same savings of $124 billion from Medicare and $54 billion from Medicaid that he sought earlier.

The new proposal was a concession to GOP demands that the president propose a detailed seven-year package, rather than working with the broad-brush 10-year outline he unveiled six months ago.

``At least we've got a document we can negotiate from,'' said Rep. David Hobson, R-Ohio, a senior member of the House Budget Committee.

``In the past, they had nothing but a news release and platitudes.''

Democratic unity behind the measure was far from certain. The plan, drafted chiefly by administration officials, left some party members skeptical about the size of its tax cuts and its savings in Medicare and Medicaid.

``There is still widespread sentiment here among congressional Democrats across the political spectrum that you don't start to balance the budget with a tax cut,'' said Rep. Martin Sabo, D-Minn., a Democratic negotiator at the talks.

``A tax cut should come after we've dealt with the fiscal problem.''

Meanwhile, Clinton vetoed the seven-year budget-balancing package that Republicans pushed through Congress last month

Brandishing the pen President Johnson used to sign legislation creating Medicare 30 years ago, Clinton criticized the GOP plan, saying it would harshly slash that program and Medicaid, education, environment and welfare while shrinking tax breaks for millions of the working poor.

``With this veto, the extreme Republican effort to balance the budget through wrongheaded cuts and misplaced priorities is over,'' Clinton said as he vetoed the measure before television cameras in the Oval Office.

``Now it's up to all of us to go back to work together to show we can balance the budget and be true to our values and our economic interests.''

The GOP measure would have pared taxes for many families and businesses by $245 billion, an amount the administration wants to reduce by more than half.

The bill also would have dramatically reworked health care programs for the elderly and poor, forcing savings of $270 billion from Medicare and $163 billion from Medicaid.

For technical reasons, the amounts of savings Clinton and the Republicans have proposed are not directly comparable.

Clinton said he would reveal his new plan today, and Republicans said they would give it to the Congressional Budget Office for scrutiny, which should take about a week.

According to administration and congressional sources who spoke on condition of anonymity, Clinton's new plan was expected to:

Save $49 billion from welfare, about $15 billion more than he proposed in June but well below GOP plans.

Eliminate the $57 billion increase Clinton had proposed for annually approved domestic programs, which range from national park maintenance to biomedical research.

Save about $20 billion by changing the way the government calculates the inflation rate. Both income tax brackets and cost-of-living increases for Social Security recipients are adjusted annually for inflation. This change would slow increases in Social Security benefits and push more people into higher tax brackets.

Cost the elderly and disabled $50 billion less in Medicare premiums than the GOP proposal and spare hospitals at least $25 billion in Medicare reductions.

LENGTH: Medium:   85 lines
ILLUSTRATION: PHOTO:  AP. As a bust of Harry Truman stands guard, President 
          Clinton - with the pen Lyndon Johnson used to enact Medicare - 
          vetoes the GOP balanced budget bill. color.